Stock trading platform Saxo Bank says the gold market appears to be resuming its bullish trend after a sideways correction.
Technical analyst Kim Cramer Larsson sees gold potentially pushing above the US$2,500 ($3,788) per ounce mark.
The precious metal is currently fetching around US$2,470 per ounce, having rallied over 50% since September 2022.
“The precious metal is currently breaking above the 0.618 retracement at US$2,434 and if closing above this level, gold could test its previous peak and all-time high, possibly reaching +2,500,” he says
“Gold failed earlier this month to break higher, but this time it could succeed.”
Cramer Larsson says the relative strength index (RSI) – which measures the price momentum of market-traded assets – is showing positive sentiment, and if it closes back above 60, it will further confirm the bullish outlook for gold.
He adds that gold needs to close below US$2,360 to reverse the bullish trend.
At the same time, Cramer Larsson says silver appears to have bottomed and is potentially headed for a rebound back up to US$29 per ounce.
Silver hit its highest point in about 12 years in May this year when it climbed to US$32.42 per ounce, a level not seen since October 2012.
The price is currently sitting just over US$28 per ounce, 13.5% below its May peak.
“When I see an engulfing candle on FX spot, I am a bit skeptical, so I always check with the futures market,” Cramer Larsson says
“And, for silver, there is also a bullish engulfing candle formed on the future, making the pattern more reliable.
“So, despite RSI not showing divergence, silver could rebound to around US$29. A break above the upper falling trendline is likely to be the first indication of Silver reversing its bearish trend.”
Cramer Larsson says a daily close above US$29.45 is needed for silver to establish a bullish trend, while a daily close below US$26.40 will extend the bearish move.
The gold momentum continues ahead of the Australian Gold Conference being held at the Crown Towers in Sydney from 26-28 August 2024.
The event will be focusing on the role gold has to play in protecting purchasing power.
Attendees can take part in a free special event on Monday 26 August aimed at introducing Australians to the potential of investing in gold beyond traditional avenues, focusing on the shift from culturally influenced jewellery to modern bullion, shares and digital gold products.
Mining.com.au is a media partner of this year’s event. To register click here.
Write to Angela East at Mining.com.au
Images: Saxo and iStock
